Enhanced maternity pay and shared parental pay

Some employers give their employees enhanced rates of maternity pay for part or all of their maternity leave period. Where this occurs, must they also pay enhanced pay rates during shared parental leave (SPL)?

Statutory rates

Statutory maternity pay (SMP) is paid for up to 39 weeks. During this period an eligible employee is entitled to receive 90% of her average weekly earnings (before tax) for the first six weeks and then £145.18 p.w. or 90% of her average weekly earnings (whichever is lower), for the next 33 weeks. However, some employers voluntarily pay an enhanced rate of pay for some or all of the maternity leave period.

Shared parental pay

For some time there’s been a debate about how this practice affects shared parental pay (ShPP). It is available during shared parental leave (SPL) and paid at the same statutory rates. Where an employer pays enhanced maternity pay, must it also pay ShPP at the same enhanced rate? It’s been argued that a failure to do so is discriminatory to male employees.

The Employment Appeal Tribunal (EAT) has answered this in Capita Customer Management Ltd v Ali 2018 (see The next step ). Capita (C) paid women enhanced maternity pay; those on maternity leave received 14 weeks’ full pay and then 25 weeks’ SMP. Mr Ali (A) took two weeks’ ordinary paternity leave when his daughter was born and C paid him full pay during this time. His wife subsequently returned to work (with another employer) and A wished to take further leave to look after his daughter. C said that he could take SPL but would only receive the statutory rate of ShPP, not an enhanced rate.

Is that sexist?

A argued that he should receive exactly the same rate of pay as a woman on maternity leave and claimed this difference in treatment amounted to sex discrimination. The tribunal agreed and C appealed to the EAT. It noted that where the treatment of a man and a woman is compared in a sex discrimination case, there must be “no material difference between their circumstances” .

EAT ruling

However, it went on to rule that: (1) the circumstances of a woman on maternity leave are different to those of a man on SPL; (2) the purpose of maternity leave is to enable the mother to recover from giving birth and bond with her child; and (3) the purpose of SPL is childcare, not welfare. This meant the correct comparator for A was a woman on SPL, not a woman on maternity leave. As C paid women on SPL the same as men, there was no discrimination and A lost his case.

Tip 1. This ruling means employers don’t have to pay employees enhanced pay during SPL if they voluntarily pay enhanced maternity pay.

Tip 2. That said, you must pay men and women who take SPL the same rate of pay, i.e. you can’t pay enhanced ShPP for women but not men. That would definitely amount to discrimination.

Tip 3. It’s best to set out the SPL and ShPP rules in a clear shared parental leave and pay policy (see The next step ).

Summary

The Employment Appeal Tribunal has ruled that employers who pay enhanced maternity pay rather than the statutory rate don’t have to pay employees the same enhanced rate during SPL. However, women and men must be paid the same rate during SPL. If there’s a difference, it will amount to sex discrimination.